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DATE

Tuesday, Aug. 11, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer - John Kiernan
  • Chief Financial Officer - Bradley Heine

TAKEAWAYS

  • Revenue -- $9.0 million for the quarter, an increase of 7.7% year over year reflecting increased land management lease income.
  • Net Income -- $2.1 million or $0.29 per diluted share, compared to a net loss of $18.3 million in the prior year period due to the completion of accelerated depreciation on citrus trees.
  • Adjusted EBITDA -- $4.6 million for the quarter, a decrease from $19.3 million in the prior year period primarily resulting from lower crop insurance proceeds and reduced gains on equipment sales.
  • Cash and Cash Equivalents -- $55.6 million at quarter-end, an increase of $17.5 million since the previous fiscal year-end driven by $35 million in net proceeds from land and equipment sales.
  • Net Debt -- $29.8 million as of June 30, 2026, representing a reduction of $17.6 million from the prior fiscal year-end.
  • Total Acreage -- approximately 47,300 acres across eight Florida counties, which management stated is the basis for its ongoing land monetization and development strategy.
  • Agricultural Lease Agreement -- 3,280 acres in Hendry County, providing recurring contracted income and a purchase option valid through June 2029.
  • Purchase Option Valuation -- $29.5 million or $9,000 per acre, which management noted is consistent with recent agricultural land sales and validates their internal portfolio valuation.
  • Citree Acquisition -- $2.0 million in cash to acquire the remaining 49% interest in a joint venture holding 1,200 acres in DeSoto County.
  • Acquired Debt -- $3.3 million, representing the total outstanding debt of Citree for which the company assumed sole responsibility following the buyout.
  • Share Repurchases -- $10.0 million total, with 245,399 shares repurchased since the program began, including 38,059 shares in the third quarter.
  • General and Administrative Expense -- decreased 21.2% year over year for the quarter, reflecting lower employee expenses and insurance premiums.
  • Current Ratio -- 7.96 to 1, with total working capital of $50.6 million at the end of the third quarter.
  • Available Credit -- approximately $92.5 million under the company's existing credit facility as of June 30, 2026.
  • Fiscal Year 2026 Adjusted EBITDA Guidance -- approximately $15 million, an increase from the prior guidance of $14 million.
  • Fiscal Year 2026 Cash Guidance -- approximately $48 million at year-end, which management noted is sufficient to fund operations through 2029.
  • Fiscal Year 2026 Net Debt Guidance -- approximately $37 million, assuming the minimum required balance of $2.5 million remains on the revolving line of credit.
  • Reporting Segment Change -- elimination of separate Alico Citrus and Land Management segments, with the company now managing operations as a single reportable segment following the citrus wind-down.
  • Development Progress -- movement of the Corkscrew Grove East Village into state and federal permitting following local entitlement approval in April 2026.
  • Conservation Area -- more than 6,000 acres, intended to be placed in permanent conservation as part of the Corkscrew Grove Villages proposal.
  • Minimum Liquidity Requirement -- $5.8 million at quarter-end, compared to the required minimum balance under the credit agreement.
  • Office Lease Savings -- anticipated beginning in the second quarter of the next fiscal year as part of overhead reduction initiatives.

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RISKS

  • CFO Heine stated, "The fourth quarter will be about much lower on a run rate basis of revenue... we expect this to be more of an EBITDA usage quarter," reflecting seasonal patterns and fixed costs following the citrus wind-down.

SUMMARY

Management reported that the company is executing a multiyear strategic transformation from citrus production to a diversified land management and development model. Financial results for the third quarter were driven by land leasing income and the wind-down of citrus operations, which led to the consolidation of segment reporting. The company maintained a cash position of $55.6 million, which management stated provides a financial runway through fiscal year 2029 for real estate development without requiring additional asset sales. Strategic focus remains on advancing the Corkscrew Grove Villages entitlement process and optimizing agricultural lease revenue across the approximately 47,300-acre Florida portfolio.

  • CEO Kiernan noted that the $9,000 per acre valuation in the new lease "supports our conservative view that our roughly 47,300-acre portfolio carries substantially more value than is reflected in our current market capitalization."
  • Management confirmed that the East Village project is entering state and federal permitting, with construction potentially beginning in 2028 or 2029.
  • CEO Kiernan stated that the acquisition of the remaining 49% of Citree "simplifies our corporate structure and gives us full control over the future reuse of that property."
  • Management indicated that approximately 98% of the company's farmable acreage continues to be leased.
  • The company expects to achieve further overhead savings starting in the second quarter of the next fiscal year through a new office lease and other G&A reduction initiatives.
  • CEO Kiernan attributed the company's flexibility to its balance sheet, stating that cash levels give Alico the ability to advance its "real estate development pipeline on our own timeline."

INDUSTRY GLOSSARY

  • Adjusted EBITDA: A non-GAAP financial measure that excludes interest, taxes, depreciation, and amortization, further adjusted for asset impairments or restructuring charges.
  • CREW: Corkscrew Regional Ecosystem Watershed, a regional conservation area in Florida.
  • Entitlement: The legal process of obtaining government approvals for the right to develop land for a specific use.
  • Florida Forever: A state-funded program in Florida for land conservation and environmental protection.
  • Net Debt: A liquidity metric calculated as total long-term debt and lines of credit minus cash and cash equivalents.
  • RLSA: Rural Land Stewardship Area, a program designed to encourage sustainable growth and preserve agricultural and environmental resources in Florida.

Full Conference Call Transcript

Operator: Good morning, and welcome to Alico's Third Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the call over to your host, John Mills, Managing Partner at ICR. Please go ahead.

John Mills: Good morning, everyone, and thank you for joining us for Alico's Third Quarter 2026 Conference Call. On the call today are John Kiernan, President and Chief Executive Officer; and Brad Heine, Chief Financial Officer. By now, everyone should have access to the third quarter 2026 earnings release, which went out yesterday at approximately 4:15 p.m. Eastern Time. If you've not had a chance to view the release, it's available on the Investor Relations portion of the company's website at alicoinc.com. This call is being webcast, and a replay will be available on Alico's website as well. Before we begin, we'd like to remind everyone that the prepared remarks contain forward-looking statements.

Such statements are subject to risks, uncertainties and other factors that may cause the actual results to differ materially from those expressed or implied in these statements. Important factors that could cause or contribute to such differences include risks detailed in the company's quarterly reports on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K and any amendments thereto filed with the SEC and those mentioned in the earnings release. The company undertakes no obligation to subsequently update or revise the forward-looking statements made on today's call, except as required by law. During this call, the company may also discuss non-GAAP financial measures, including EBITDA, adjusted EBITDA and net debt.

For more details on these measures, please refer to the company's press release issued yesterday. And with that, it is my pleasure to turn the call over to the company's President and CEO, Mr. John Kiernan.

John Kiernan: Thank you, John, and good morning, everyone. Our third quarter results reflect a business that is generating cash and building the flexibility to execute our strategy on our own terms. We ended the quarter with $55.6 million in cash and cash equivalents, up $17.5 million since fiscal year-end, our strongest balance sheet position since we began our strategic transformation in January 2025. That cash position creates net debt of just $29.8 million and gives us valuable flexibility to advance our entitled real estate development pipeline on our own timeline, not one dictated by liquidity. Given that strength, we're raising our fiscal year 2026 guidance. Let me walk through the key developments during and subsequent to the third quarter end.

First, we entered into an agricultural lease agreement for approximately 3,280 acres in Hendry County, structured with an option to purchase the property for $29.5 million or $9,000 per acre. This transaction validates our land monetization strategy in 2 ways. It gives us recurring contracted lease income and gives our counterparty the ability to acquire the land at what we believe is a fair current market value for that acreage. That $9,000 per acre price holds through June of 2029, after which the purchase price escalates annually.

The current $9,000 per acre figure is consistent with the per acre values we've realized on our recent agricultural land sales and supports our conservative view that our roughly 47,300-acre portfolio carries substantially more value than is reflected in our current market capitalization. We structured this deal so that it delivers value for us either way, contracted lease income and a compelling embedded value outcome if the option is exercised down the road. That kind of flexibility is what our land monetization strategy is designed to capture.

Second, during the quarter, we acquired the remaining 49% interest in Citree, a joint venture through which we held a 51% interest in approximately 1,200 acres of land within our Joshua Grove in DeSoto County. Because we held the majority interest, Citree's assets and liabilities, including its approximately $3.3 million of outstanding debt, were already reflected on our consolidated balance sheet. As part of this transaction, we paid $2 million in cash for the remaining 49% interest and took on sole responsibility for that debt, which our joint venture partner had previously shared.

We now own 100% of that entity and its underlying Joshua Grove acres outright, which we believe simplifies our corporate structure and gives us full control over the future reuse of that property. Third, Corkscrew Grove East Village has moved into state and federal permitting following its local entitlement approval in April. That process is progressing, and we believe that we remain on track for potential construction commencement in 2028 or 2029 pending receipt of all required approvals from the South Florida Water Management District, the U.S. Army Corps of Engineers and the U.S. Fish and Wildlife Service. Fourth, we remain focused on operational discipline and continue to review our operating cost structure to improve cash flow.

This year, we are executing a number of initiatives to reduce overhead, including a new office lease that we expect will begin delivering additional savings starting in the second quarter of next fiscal year. Fifth, on the capital allocation side, we completed $10 million of our share repurchase program during the quarter, having repurchased 245,399 shares in total, including 38,059 shares in the third quarter alone. Combined with our regular common dividend, we continue to return meaningful capital to shareholders this year while still building cash, which speaks to the strength of the cash flow the business is generating and supports our strategic transformation.

Our diversified land management programs, including our agricultural leases, sod, rock and sand royalty arrangements, all continue to perform well and approximately 98% of our farmable acreage continues to be leased. Our priorities for fiscal 2026 remain unchanged, optimize our agricultural operations by maximizing revenue from our diversified leasing programs while maintaining cost controls, advance our development projects through the entitlement process with particular focus on Corkscrew Grove Villages, balance our entitlement-related investments with shareholder returns while maintaining financial flexibility and pursue operational excellence by leveraging our experienced team and local relationships to execute efficiently. Given our performance through the first 9 months of the fiscal year, we are raising our fiscal year 2026 guidance.

We now expect adjusted EBITDA of approximately $15 million, and we now expect to end the fiscal year with approximately $48 million of cash and net debt of approximately $37 million. This liquidity should be sufficient to support our operations for at least 3 additional fiscal years through 2029 without requiring any additional asset sales. We recognize this remains a multiyear transformation, and we believe the progress we are reporting this quarter on our balance sheet, in our leasing program and with our entitlement and development entitlements demonstrate that we remain on track to unlock the substantial value we believe exists within our approximately 47,300-acre Florida portfolio while maintaining our commitment to responsible land stewardship.

With that, I'll turn it over to Brad Heine, our CFO, to walk through our detailed financial results.

Bradley Heine: Thank you, John. I'll now walk everyone through our third quarter fiscal 2026 financial results and provide additional details on our financial position. Before I get into the numbers, I want to note a change in how we're presenting our results. Beginning with this quarter, we are no longer presenting Alico Citrus and Land Management and Other operations as separate reportable segments. Following the substantial completion of our citrus wind-down, we now manage and evaluate the business as a single reportable segment. We will continue to disclose revenue by activity on the face of the income statement for comparability, but we will no longer provide a full segment level breakout of expenses and gross profit going forward.

For the 3 months ended June 30, 2026, we reported total revenue of $9 million compared to $8.4 million in the prior year period, an increase of 7.7%. For the 9 months ended June 30, 2026, total revenue was $16.3 million compared to $43.3 million in the prior year period, with the decline primarily reflecting the substantial completion of our citrus wind-down. Net income attributable to Alico common stockholders for the 3 months ended June 30, 2026, was $2.1 million or $0.29 per diluted share compared to a net loss of $18.3 million or $2.39 per diluted share in the prior year period.

The improvement was principally the result of the completion in April this quarter of the accelerated depreciation on our citrus trees that we recorded in the prior year period, combined with increased lease income from our land management operations. We had EBITDA of $4.6 million for the third quarter compared to $19.2 million in the prior year period. That decline is not a reflection of weaker performance this quarter. It's principally due to a decrease in crop insurance proceeds and a lower gain on the sale of property and equipment. Adjusted EBITDA was also $4.6 million for the quarter compared to $19.3 million in the prior year period.

For the 9 months ended June 30, 2026, EBITDA was $23.7 million compared to a loss of $2.2 million in the prior year period, and adjusted EBITDA was $24.2 million compared to $25.3 million in the prior year period. Turning to the balance sheet. Cash and cash equivalents at quarter end were $55.6 million, up from $38.1 million in the fiscal year-end, an increase of $17.5 million. That increase reflects approximately $35 million of net proceeds from land and equipment sales during the 9-month period, partially offset by the $10 million share repurchase program that we completed, the $5.1 million advance to Corkscrew Grove Stewardship District and the $2 million Citree acquisition.

Net debt was $29.8 million at quarter end compared to $47.4 million at fiscal year-end, a reduction of $17.6 million. Working capital was $50.6 million with a current ratio of 7.96:1. Total debt was $85.4 million, essentially unchanged from fiscal year-end. Available borrowings under our credit facility were approximately $92.5 million, and our minimum liquidity requirement was $5.8 million. We think this combination, a strong growing balance sheet, low and declining net debt and substantial undrawn borrowing capacity gives us considerable flexibility as we move into the fourth quarter and beyond. Through the third quarter, we have completed $10 million of share repurchases, resulting in 245,399 shares being repurchased since the program began.

We are raising our fiscal year 2026 guidance. We now expect adjusted EBITDA of approximately $15 million, up from our prior guidance of approximately $14 million. We also expect to end the fiscal year with cash of approximately $48 million and net debt of approximately $37 million, with only the minimum required balance of $2.5 million remaining on our revolving line of credit. Now I'd like to turn the call back to John for his closing remarks.

John Kiernan: Thank you, Brad. Before we open the call for questions, I want to emphasize a few key points. First, Alico is delivering on what we said we would do. The new agricultural lease, the continued high utilization of our farmable acres, the Citree transaction and the progress of our entitlement pipeline all reflect consistent execution of our strategy. Second, our balance sheet gives us the runway and flexibility to advance our development projects on our own terms for at least 2029 without any additional asset sales. $55.6 million in cash and net debt of just $29.8 million and $92.5 million of available borrowing capacity, we believe that we have the resources to execute without being driven by liquidity constraints.

Third, Corkscrew Grove East Village has moved into state and federal permitting following its local entitlement approval in April, and we remain on track for potential construction commencement in 2028 or 2029. Finally, we remain focused on responsible land stewardship and conservation. Our commitment to preserving more than 6,000 acres as part of the Corkscrew Grove Villages project, together with our wildlife underpass partnership with the Florida Department of Transportation, reflects our values and differentiates Alico in the development community. Sachi, we'll now open up the call for questions.

Operator: [Operator Instructions] The first question is from Raimzhan Bayterek from Freedom Broker.

Raimzhan Bayterek: So I just want to clarify the EBITDA outlook. You reported $24 million of adjusted EBITDA through the first 9 months versus full year guidance of approximately $15 million. Could you provide a bit more color on the bridge to this number?

Bradley Heine: Sure. Let me take this. In the last quarter of the year, the substantial portion of our revenue has already been earned for the year related to the harvest -- the last citrus harvest and some beneficial lease income that we received in the third quarter. The fourth quarter will be about much lower on a run rate basis of revenue. And accordingly, the expenses, many of which are spread evenly across the year, will continue around the same pace. So as a result, we expect this to be more of an EBITDA usage quarter.

Raimzhan Bayterek: Okay. That's very helpful. So could you tell what part of this would be -- most of this would be nonrecurring expenses or some cash expenses?

Bradley Heine: Many of them are recurring expenses. It will be the ongoing costs associated with property taxes and our G&A expenses. I don't know if there's anything one-time in nature that I can necessarily call out.

Operator: [Operator Instructions] There are no further questions at this time. I would like to turn the floor back over to John Kiernan for closing comments.

John Kiernan: All right. Thank you, Sachi. We really appreciate your continuous interest in Alico, everyone, and we look forward to updating you on our year-end progress in November. Thanks very much. Have a great day.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.